Last year, in 2013, more then half of the homes sold were on the market for 6 weeks or less. This was the shortest time on the market since 2005. One of the reasons why homes sold so quickly was due to lower then normal inventory levels. In this type of market, sellers are seeing more and more offers over the asking price. In 2013, 50% of the properties that sold last year, sold over the asking price. Most of the sales, almost all, had multiple offers to buy the property. When this happens, buyers have no choice but to participate in an auction type situation. The situation is changing and the inventory levels have increased, providing buyers with more choices. As prices increase, sellers are more willing to make a move.

Thinking of selling in the near future? If you are, buyers are out there with a positive attitude about home ownership. Since the big recession, buyers believe it is still a good time to purchase their home before they get priced out. So if you’re planning to sell, there are buyers out there ready to purchase your home. Don’t wait too long or you’ll miss all of the excitement.

Since the start of the Great Recession, property values have been on the decline until the last couple of years. California has the most cities that are experiencing greater appreciation then other parts of the nation and San Francisco has the highest median price, $769,000, in the nation. If you haven’t purchased a home as of now, it is still a good time to buy before the prices get way out of hand and before interest rates prices you out of the market.

Due to lack of inventory, San Francisco is really heating up for the summer. The Median Sales Price was up 35.6 % to $1,055,000 for single family homes and 18.2 % to $827,500 for Condo/TIC/Coop properties. Supply of Inventory decreased 23.1 % for single family units and 36.4 % for Condo/TIC/Coop units.

You can almost say good by to the 3% loans. Interest rates are going up as well. Making it even harder for buyers to purchase anything in San Francisco. But, loans are still cheap, don’t wait until they reach double digits again.

San Francisco is doing well. Prices have been and still going up. Fueled by low inventory, low interest rates and a high demand, the market prices will continue to rise. If you think it is hard to buy something today, it will be harder tomorrow.

Single-Family Homes

Median Sales Price: $1,000,000

Active For-Sale Inventory: 541

Days on Market: 27

Condominiums

Median Sales Price: $850,000

Active For-Sale Inventory: 740

Days on Market: 31

Statistics reflect year-over-year figures from April 2012 to April 2013

May 2013

A million dollars doesn’t go as far as it used to in San Francisco

“Don’t you think we should ask for more than a million dollars? A million dollars isn’t exactly a lot of money these days,” Number 2 – Austin Powers International Man of Mystery.

If your clients are looking to buy a home in San Francisco after relocating from elsewhere in the nation, they can be forgiven for making the same mistake Austin Powers did in thinking he could get what he wanted (in his case, world domination) for a mere $1 million. Newcomers to the area are often shocked to find that $1 million might not get them all the amenities in a home that they desire.

Add to escalating prices, high demand, tight inventory and stiff competition from investors who can pay all cash and homebuyers may too take a moment’s pause (with pinky finger firmly resting at the corner of one’s mouth).

Single-Family Home Sales

Compared to April of last year, the inventory of single-family homes for sale in the City fell by 19.6 percent, to a total of 541 properties. The number of homes under contract rose by 11.5 percent, while the number of homes sold dropped by 4.1 percent, to a total of 212 properties.

For homes that were priced below $700,000, the months supply of inventory dropped by 42.6 percent to 1.1 months. For higher-priced homes between $700,000 and $1.2 million, the months supply of inventory also fell, by 20.6 percent to 1.1 months.

Properties being sold within just a few weeks of listing indicates a strong sellers market. Sellers are, in most cases, getting multiple offers due to limited inventory.

One region of the City experiencing a boost of mojo is the Central East section known as District 9 which includes the neighborhoods of Portero Hill, Dog Patch, Inner Mission and Mission Bay. Since 2011, the inventory of homes in this district has shrunk more than 42 percent with just 48 properties for sale in April 2013. At the same time, median prices in the area hit a 2-year high in April 2013.

The Inner Mission neighborhood has become a popular area for young tech professionals, due to its proximity to downtown, availability of mass transit, shuttles to Silicon Valley and an abundance of popular restaurants. The median price for a home here is $1,001,000, up 33 percent from the same time last year.

Condominium Sales

Along with single-family homes, the inventory of condominiums for sale in the city fell by 17.1 percent, to a total of 740 condominiums. The number of condominiums under contract rose by 20.6 percent, while the number of condominiums sold decreased by 0.3 percent, to a total of 295 units.

For condominiums that were priced between $500,000 and $900,000, the months supply of inventory tightened by 46.2 percent to 0.8 months. For luxury condominiums priced above $900,000, the months supply of inventory also dropped by 64.2 percent to 0.9 months.

One area in the City, perhaps not often thought of for condos is District 1, which includes the neighborhoods of Richmond and Sea Cliff, which sits just south of the beautiful Presidio. Condos in the area have been a hot commodity with inventory there decreasing by nearly 60 percent over the last two years. The median price for a condo in the district reached $810,500 in April 2013.

Outlook

The Conference Board Consumer Confidence Index®, which had declined in March, increased in April. Lynn Franco, Director of Economic Indicators at The Conference Board said: “Consumer Confidence improved in April, as consumers’ expectations about the short-term economic outlook and their income prospects improved. However, consumers’ confidence has been challenged several times over the past few months by such events as the fiscal cliff, the payroll tax hike and the sequester. Thus, while expectations appear to have bounced back, it is too soon to tell if confidence is actually on the mend.”

The California Association of REALTORS® (C.A.R.) reported California home sales and prices experiencing strong increases in April, with the median price surpassing the $400,000-mark for the first time in five years. In addition, homes across the state sold more quickly in April 2013, with the median number of days dropping to 27.9 from 48 days in April 2012.

CNN Money recently reported that, “during the housing bust, sales were often derailed by low-ball appraisals that fell far shy of a home’s selling price. But now, as home prices climb and housing inventories shrink, appraisers are valuing homes at or above their selling prices.”

According to SF Gate, “San Francisco rental rates rose 15.8 percent in the first quarter of 2013 compared with the same time last year, to an average of $2,663 for all size units. Studio apartments averaged $2,075, up 16.5 percent in a year. The steepest rise came in one-bedroom, one-bathroom apartments, which are now $2,611 – up 19.9 percent in the past year and up 30 percent from two years ago.”

When the housing market declines, it effects everybody. When it is on the upswing, more opportunities are created for everybody. We have been in a recession for 6 years and we are seeing better times. Let’s hope that this is not another bubble.

I have been experiencing a market that resembles the last seller’s market not a buyer’s market. There is not a lot of inventory available for all of the buyers here in the Bay Area. I have a property for sale in Pacifica, Ca, listed at $338k and received 6 offers and all above the list price. I have been also representing buyers and making offers to purchase, but have been in bidding wars. In San Mateo county, it would takeapprox. 4.1 months to sell all of the homes that are on the market compared to 4.5 months same time last year. Where are all of the bank owned properties?

There has been more then 610,000 foreclosures last month and represents a 1% increase then the previous quarter. On average it took 336 days to complete the foreclosure process nation wide. New York took 986 days to complete the process while Texas only took 86 days. Wow, Texas seems to be doing something different.

President Obama is expected to help struggling homeowners with their mortgage payments. The Wall Street Journal reports, “The administration’s plan is expected to eliminate “appraisals and extensive underwriting requirements for most borrowers” who are up-to-date on their mortgage and want to refinance at a lower rate”. This should help those who have been keeping up with their payments and were looking for assistance in avoiding foreclosure.

While most the country is having foreclosure problems, there are areas that are still doing well. These areas are the most expensive areas in the United States. The economy today doesn’t seem to hurt these types of properties. In fact, it seems to have increased the sales activity in this price range.

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